FTX Unveils Controversial Payout Plan for Users in Challenging Jurisdictions

Representatives of the bankrupt exchange FTX have filed a court petition outlining a new payment protocol for users from «problematic» jurisdictions. This was reported by Sunil Kavuri, a spokesperson for the largest group of creditors associated with the platform.

If the court approves this plan, some users will not receive their funds.

The plan includes 49 countries, among them China, Russia, Ukraine, Pakistan, and Saudi Arabia. These jurisdictions represent 5% of the total claims amounting to $16 billion. Notably, 82% of the asset value is concentrated in China.

The proposal entails hiring local attorneys to assess the legality of disbursements in each of the 49 countries. If these experts determine that transferring funds complies with local regulations, creditors will receive their money through payment providers like Payoneer.

If the payments are deemed illegal, the region will officially be classified as a «restricted jurisdiction.» Creditors from these areas will have 45 days to contest this ruling.

Claims from users in jurisdictions where payments cannot be made will be nullified. The recovered funds will be returned to the general bankruptcy estate to be redistributed among other users. The FTX team emphasized their commitment to reducing the list of «problematic» countries.

A court hearing on this matter is scheduled for July 22.

One of the creditors from China, using the pseudonym zhetengji, has stated that he will challenge this decision at every opportunity. He has encouraged other users to join him, labeling the plan as «completely unjustified.»

It is important to note that as of April, FTX liquidators rejected nearly 400,000 compensation claims totaling $2.55 billion.